An interesting issue of costs arose out of a Fast Track Trial that I was instructed on behalf of the Claimant, where liability had been admitted, but quantum remained in dispute. The central dispute concerned whether the Claimant’s costs, following success at trial, should be restricted to portal-level fixed recoverable costs.

The Defendant argued that CPR 45.35 gave the Court discretion to limit the Claimant to Stage 1 and 2 portal costs because the Claimant had exited the RTA Protocol unreasonably. The Claimant accepted that the exit was erroneous; it exited even though an interim payment had in fact been made, but argued that the Defendant’s subsequent conduct ultimately caused the Claimant no alternative to issue Part 7 proceedings.

For clarity, this was a post 1st October 2023 claim.

CPR 45

Three potential gateways under CPR 45.35 were considered:

  • 45.35(2)(a) – insufficient information in the CNF (not applicable).
  • 45.35(2)(b) – unreasonable conduct causing the protocol to discontinue (potentially applicable). One of the three subsections could be utilised (i) by discontinuing the process set out in the relevant Protocol and starting proceedings under Part 7 (ii)by valuing the claim at more than £25,000, so that the claimant did not need to comply with the relevant Protocol or (iii) xcept for paragraph (2)(a), in any other way that caused the process in the relevant Protocol to be discontinued.
  • 45.35(2)(c) – failure to comply with the Protocol at all (not applicable; the claim began in the portal).

Parties’ Positions

The Defendant argued that:-

  • The Claimant’s exit from the portal was unreasonable and irreversible under paragraph 5.11 of the RTA protocol (Claims which no longer continue under this Protocol cannot subsequently re-enter the process).
  • The Defendant was an insurer and not a legal representative, so the Claimant should have done more to explain to the Defendant why not providing a breakdown was contrary to the rules.
  • The Claimant could and should have asked the Court to transfer the claim to a Part 8 in accordance with para 4.1 PD49F (The court may at any stage order a claim that has been started under Part 7 to continue under the Part 8 procedure as modified by this Practice Direction)
  • The Fast Track Trial, in any event, resembled a Stage 3 hearing

The Judge then questioned whether, if he rejected CPR 45.35, he should (instead) exercise the power to reduce the Claimant’s costs by 50% under CPR 45.13. The Defendant argued that the Court should, alleging unreasonable conduct akin to the Dammerman test. They argued there was no permissible explanation for exiting the portal.

Claimant

The Claimant argued that-

  • Although the portal exit was a mistake, the real cause of Part 7 proceedings was the Defendant’s refusal to provide a breakdown to comply with para 7.41 (When making a counter-offer the defendant must propose an amount for each head of damage and may, in addition, make an offer that is higher than the total of the amounts proposed for all heads of damage. The defendant must also explain in the counter-offer why a particular head of damage has been reduced.)
  • Had the Defendant provided the breakdown, the matter likely would have settled at Stage 2 or proceeded to a Stage 3 hearing under Part 8.
  • The Defendant was encouraging the informal Stage 2, but chose not provide the break down because it was necessary to move to Stage 3.

The Claimant argued CPR 45.13 should not be engaged because there was no causative link between the Claimant’s portal exit and any increased costs as a result of Part 7. Both the Judge and the Defendant noted that CPR 45.13 did not appear to require causation to be established. There was a question of whether there was a threshold for unreasonable conduct that needed to be met. The Claimant argued that even conduct such as a breach of the Court rules (failure to upload the witness statement, requiring relief from sanciton, which was granted at the start of the trial) wouldn’t have been sufficient.

This was argued because the Defendant had not suffered any incurred costs and even if it did, it would be compensated by the costs allowed under CPR 45.8 (£250+VAT). The Claimant also submitted that CPR 45.13 did not cover the MOJ portal costs and only started when the fast track costs regime started, arguing that the breach led to exiting the MOJ portal, but did not take place after it.

Judge’s decision

The judge found:

  1. The Claimant did exit the portal unreasonably, as the interim payment had clearly been received.
  2. However, the Defendant had effectively attempted to run a “shadow Stage 2” process, encouraged continuation under the protocol, but then refused to provide the necessary breakdown to progress the claim through to Stage 3.
  3. The Defendant should have known how to replicate or continue the process, and could have facilitated a Stage 3-type disposal even outside the portal. The Defendant, as an insurer, was regularly conducting Stage 2 proceedings on the portal
  4. The Defendant’s refusal to engage properly was a main cause of the claim escalating to Part 7, and no application was ever made by the Defendant to have it transferred to Part 8 under paa 4.1 PD49F
  5. The hearing was not a Stage 3 disposal; it was properly a fast-track trial with oral evidence.
  6. CPR 45.35 discretion should therefore be exercised in the Claimant’s favour, meaning costs would not be reduced to portal rates.

CPR 45.13 (50% Reduction of Fixed Costs)

Although CPR 45.13 covers unreasonable conduct even before litigation, the judge held:

  • The Claimant’s unreasonable exit from the portal did not cause the claim to become a Part 7 dispute.
  • Other errors (such as failure to upload a witness statement or errors in an application) were minor, did not cause additional costs, and did not justify a punitive reduction.
  • Ultimately, the Defendant’s conduct was equally, if not more, responsible for the matter reaching trial.

Commentary

Trials subject to the Post 1st October 2023 fixed costs regime are going to be come more commonplace. Different facts and circumstances will mean that some arguments raised the Defendant will succeed. The CPR 45.13 ‘50% rule’ (which also allows for the increase of costs) can be ulitised by the Claimant as well as the Defendant.

This is just one example but all cases will be fact sensitive. In this case, the real battleground was costs; the trial was a fast-track trial, but the dispute on damages was always going to be the warm-up act.

Information 

AJH Advocacy Limited, a Limited Company which is regulated by the Bar Standards Boards (entity number 190758), ceases trading on the 12th January 2026. 

From the 12th January 2026 and onwards, Alec Hancock will practice as a Barrister at Magdalen Chambers in Exeter. For instructions on matters on or after 12th January 2026, please contact Magdalen Chambers via clerks@magdalenchambers.co.uk or by telephone on 01392 285 200.

Leave a Reply